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Illumina Inc. (ILMN - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of $1.14, which beat the Zacks Consensus Estimate of 87 cents by a stupendous 31.0%. The bottom line was above the year-ago figure of 33 cents.
The adjustments exclude the impact of GRAIL’s pre-acquisition net operating losses on GILTI, the utilization of U.S. foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective from the first quarter of 2024.
Including one-time items, the company’s GAAP EPS was $4.42 against the year-ago reported loss of $4.77 per share.
Core Illumina's GAAP EPS was $4.03 in the reported quarter.
Following the earnings announcement, ILMN stock fell 2.3% at the after-market trading yesterday.
Illumina’s Q3 Revenues
Revenues amounted to $1.08 billion, down 3.5% year over year (down 2% at CER). However, the top line beat the Zacks Consensus Estimate by 0.5%.
Illumina’s Segmental Details
Illumina has one reportable segment — Core Illumina.
Core Illumina revenues totaled $1.08 billion (down 2.3% year over year). This was primarily due to an increase in revenues from strategic partnerships and higher instrument service contract revenues on a growing install base.
Core Illumina sequencing service and other revenues totaled $150 million, up 6% year over year. Sequencing consumable revenues amounted to $741 million, up 7% year over year, primarily due to continued strong uptake in X consumables.
The company’s GRAIL segment was spun off on June 24, 2024. Hence, GRAIL has no reportable impact on the third-quarter top line.
Margins
The adjusted gross margin (excluding amortization of acquired intangible assets) was 70.5%, up 514 basis points (bps) year over year.
Research and development expenses decreased 19.7% year over year to $253 million. SG&A expenses totaled $239 million, down 21.1% from the year-ago level. The adjusted operating profit in the quarter was $269 million, up 138% from $113 million in the corresponding period of 2023. The adjusted operating margin in the quarter expanded 1481 bps to 24.9%.
Financial Update
Illumina exited the third quarter with cash and cash equivalents of $869 million compared with $920 million at the end of the second quarter of 2024.
Cumulative net cash provided by operating activities at the end of the third quarter was $473 million compared with $254 million a year ago.
Illumina’s 2024 Guidance
Illumina updated its outlook for 2024.
The company has lowered its revenue guidance. It expects revenues to decrease approximately 3% year over year and 3% at CER.
ILMN raised its guidance for Core Illumina non-GAAP operating margin to 21-21.5% from the earlier projection of 20.5-21%.
Core Illumina non-GAAP diluted EPS is projected to be in the range of $4.05- $4.15 (up from the earlier estimation of $3.80-$3.95) in 2024. The Zacks Consensus Estimate for full-year EPS is currently pegged at $3.62.
Throughout the third quarter, Illumina made headlines on many occasions. The company introduced the MiSeq i100 Series — the simplest, fastest benchtop sequencers. Illumina obtained FDA approval for TSO Comprehensive with two companion diagnostics to match patients to targeted therapies rapidly. The company also announced the opening of the Bengaluru global capability center.
Our Take
Illumina delivered better-than-expected earnings and revenues in the third quarter of 2024. The company’s innovative solutions are facilitating the next wave of progress in genomics and multiomics. The expansion of both the margins is impressive.
The lowered 2024 revenue guidance looks disappointing. Illumina continues to navigate a challenging global macro environment where customers are still constrained in their purchasing decisions. However, the company increased its operating margin and diluted EPS guidance, reflecting the outperformance in the third quarter and carrying forward the impact of the operational excellence initiatives into the fourth quarter.
Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.
Veracyte, sporting a Zacks Rank #1 at present, posted second-quarter 2024 earnings of 30 cents per share, which beat the Zacks Consensus Estimate of a loss of 3 cents. Revenues of $114.4 million surpassed the Zacks Consensus Estimate by 14%.
VCYT has an estimated earnings growth rate of 115.7% for 2024 compared with the industry’s 13.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 328.4%.
HealthEquity, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.
HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.
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ILMN Q3 Earnings Top, '24 Sales View Down, Stock Dips in Aftermarket
Illumina Inc. (ILMN - Free Report) reported third-quarter 2024 adjusted earnings per share (EPS) of $1.14, which beat the Zacks Consensus Estimate of 87 cents by a stupendous 31.0%. The bottom line was above the year-ago figure of 33 cents.
The adjustments exclude the impact of GRAIL’s pre-acquisition net operating losses on GILTI, the utilization of U.S. foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective from the first quarter of 2024.
Including one-time items, the company’s GAAP EPS was $4.42 against the year-ago reported loss of $4.77 per share.
Core Illumina's GAAP EPS was $4.03 in the reported quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Following the earnings announcement, ILMN stock fell 2.3% at the after-market trading yesterday.
Illumina’s Q3 Revenues
Revenues amounted to $1.08 billion, down 3.5% year over year (down 2% at CER). However, the top line beat the Zacks Consensus Estimate by 0.5%.
Illumina’s Segmental Details
Illumina has one reportable segment — Core Illumina.
Core Illumina revenues totaled $1.08 billion (down 2.3% year over year). This was primarily due to an increase in revenues from strategic partnerships and higher instrument service contract revenues on a growing install base.
Core Illumina sequencing service and other revenues totaled $150 million, up 6% year over year. Sequencing consumable revenues amounted to $741 million, up 7% year over year, primarily due to continued strong uptake in X consumables.
The company’s GRAIL segment was spun off on June 24, 2024. Hence, GRAIL has no reportable impact on the third-quarter top line.
Margins
The adjusted gross margin (excluding amortization of acquired intangible assets) was 70.5%, up 514 basis points (bps) year over year.
Research and development expenses decreased 19.7% year over year to $253 million. SG&A expenses totaled $239 million, down 21.1% from the year-ago level. The adjusted operating profit in the quarter was $269 million, up 138% from $113 million in the corresponding period of 2023. The adjusted operating margin in the quarter expanded 1481 bps to 24.9%.
Financial Update
Illumina exited the third quarter with cash and cash equivalents of $869 million compared with $920 million at the end of the second quarter of 2024.
Cumulative net cash provided by operating activities at the end of the third quarter was $473 million compared with $254 million a year ago.
Illumina’s 2024 Guidance
Illumina updated its outlook for 2024.
The company has lowered its revenue guidance. It expects revenues to decrease approximately 3% year over year and 3% at CER.
ILMN raised its guidance for Core Illumina non-GAAP operating margin to 21-21.5% from the earlier projection of 20.5-21%.
Core Illumina non-GAAP diluted EPS is projected to be in the range of $4.05- $4.15 (up from the earlier estimation of $3.80-$3.95) in 2024. The Zacks Consensus Estimate for full-year EPS is currently pegged at $3.62.
Illumina, Inc. Price, Consensus and EPS Surprise
Illumina, Inc. price-consensus-eps-surprise-chart | Illumina, Inc. Quote
Key Announcements
Throughout the third quarter, Illumina made headlines on many occasions. The company introduced the MiSeq i100 Series — the simplest, fastest benchtop sequencers. Illumina obtained FDA approval for TSO Comprehensive with two companion diagnostics to match patients to targeted therapies rapidly. The company also announced the opening of the Bengaluru global capability center.
Our Take
Illumina delivered better-than-expected earnings and revenues in the third quarter of 2024. The company’s innovative solutions are facilitating the next wave of progress in genomics and multiomics. The expansion of both the margins is impressive.
The lowered 2024 revenue guidance looks disappointing. Illumina continues to navigate a challenging global macro environment where customers are still constrained in their purchasing decisions. However, the company increased its operating margin and diluted EPS guidance, reflecting the outperformance in the third quarter and carrying forward the impact of the operational excellence initiatives into the fourth quarter.
ILMN’s Zacks Rank & Key Picks
ILMN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Phibro Animal Health (PAHC - Free Report) , Veracyte (VCYT - Free Report) and HealthEquity (HQY - Free Report) .
Phibro Animal Health reported fourth-quarter fiscal 2024 adjusted earnings of 41 cents per share, which topped the Zacks Consensus Estimate by 20.6%. Revenues of $273.2 million beat the Zacks Consensus Estimate by 4.1%. PAHC sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
PAHC’s fiscal 2025 earnings are expected to surge 31.9% compared with the industry’s 11.6% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 4.1%.
Veracyte, sporting a Zacks Rank #1 at present, posted second-quarter 2024 earnings of 30 cents per share, which beat the Zacks Consensus Estimate of a loss of 3 cents. Revenues of $114.4 million surpassed the Zacks Consensus Estimate by 14%.
VCYT has an estimated earnings growth rate of 115.7% for 2024 compared with the industry’s 13.7%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 328.4%.
HealthEquity, carrying a Zacks Rank #2 (Buy) at present, reported second-quarter fiscal 2025 adjusted earnings of 86 cents per share, which surpassed the Zacks Consensus Estimate by 22.9%. Revenues of $299.9 million topped the Zacks Consensus Estimate by 5.4%.
HQY has an estimated long-term earnings growth rate of 28.2% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.8%.